In the aftermath of a holiday shopping season, it is suddenly appropriate to dive into key statistics about the much coveted, in demand luxury consumer many brands have their eye on for 2018.
Are you a founder, marketing guru for a startup, or deep in the luxury market mix at an established brand? Here’s what you need to know about luxury consumer trends going into 2018 so you won’t be chasing these often elusive butterflies without a net. Brand strategist Marty Neumeier’s mantra that you need to “zag” when everyone else “zigs” provided some inspiration.
Zag 1. Cultivate Millennials But Don’t Forget the Boomers.
If you didn’t already know it, and you probably do, millennial tastes are shaping the luxury landscape for 2108. Deloitte recently projected 99 million millennials versus 77 million boomers now make up a larger segment of the luxury market. But don’t forget those boomers. It’s a big mistake. Millennials are the ones to cultivate but the boomers are the ones with greater spending impact in the market place right now. Brands are so focused on millennials that they are risking disenfranchising many of their loyal, boomer customers. Do they think the boomer consumer doesn’t notice? Guess again. Those consumers will move on to brands where they feel included and part of the dialogue. That’s a marketing opportunity worth exploring especially if millennials shop more online and boomers more in-store.
Zag 2. Pay Attention to Trends With Millennials But Not So Much With Boomers.
Again, it might be stating the obvious but growth has often been uneven in the luxury category. According to the Deloitte Fashion and Luxury Report, “millennials were three times more likely to be driven by trend than older consumers and they were less defined by routine.” This provides the perfect opportunity, depending on your product offerings, to bifurcate your marketing or expand your audience making sure your targeting is spot on. Additionally, as part of the luxury consumer base, millennials are more prone to purchase “services and ephemeral experiences over objects and goods.” Add that to your checklist, making sure to customize your approach to your audience.
Zag 3. The Experience Matters.
Retail is still thriving but the way you need to approach it is very different today. Allison Samek, CEO of legendary luxury retailer Fred Segal who just opened their first new flagship store in over 25 years, explains “Now more than ever, the luxury consumer is looking for an experience. They don’t want the same shopping experience they’ve seen before; they want one-of-a-kind, hard-to-find items that no one else has; and they want to find it in an environment that isn’t replicated anywhere else.” If you’re wondering what that experience encompasses, Samek shared that “Fred Segal has been perfecting what people are now coining ‘experiential retailing’ for the last almost 50 years. We’ve always offered the customer a place to not only shop but to listen to music, eat amazing food, touch, feel and play with product and most importantly, hang out with their friends and community.” This is exactly the type of luxury experience predicted to play a bigger role in 2018. That means starting to completely re-imagine your retail location to the in-store experience. The bottom line. Experience keeps consumers coming back to brick and mortar.
Zag 4. More Is Better.
Samek elaborated on the key differences between Fred Segal’s online and in-store luxury buyers, saying ” We see the luxury online shopper as one who may value the same product in shop but needs the speed and convenience of on-line. The in-store shopper may have more time and they certainly want the luxury experience that goes along with our offering. They want the service, attention, and most importantly the experience that can only be had in store.” So what does that encompass in these two diverse worlds? Value.
No matter how luxurious the offering or wealthy the client is, they expect value.
Home Delivery. Ever wonder why you see less shopping bags on the street? Lots of consumers are still buying but 39% of retail customers expect home delivery and the trend is growing. Retailers are literally delivering it.
Gifts. Customers are expecting a reward for loyalty. Did you notice more gifts as this holiday season’s online and offline perk? These brands are early adapters and it’s paying off.
Personalization. 45% of luxury consumers are asking for personalized products and services. Add this into your mix.
Heightened Customer Service. Luxury consumers want more today and they expect the service to go with it. Make sure it’s part of the experience from the first moment of engagement online or in-store.
Zag 5: Create The Unexpected.
Use unusual and surprising partnerships, to merge ideas. Great examples are everything from Louis Vuitton combining forces with Jeff Koons for its Masters Series to luxury brands creating rare, ‘shareable’ experiences, that are are viral social statements. They all fall into the ever important “word of mouth is as important as any marketing” to quote Samek, category. So get creative. Big brands often use extreme trips but everything from intimate dinners with artist and designers, truly unique in-store events to tapping into today’s renewed interest as philanthropy as part of the luxury brand experience are options you can put on the table.
One final note. If you’ve never read Marty Neumeier’s Zag: The Strategy of High-Performance Brands, it’s about time you did. It is absolutely inspiring.